writes "A photographer named Leslie Kelly had sued Arriba Soft Corporation for infringing his copyrights to photos when they made thumbnails of his pictures and stored them in a public image search engine. Today the federal 9th Circuit Court of Appeals affirmed the district court's ruling that making these thumbnail copies of images for the search engine was 'fair use.' Since the applicability of fair-use defenses to copyright infringement touches on all kinds of common uses of the Internet as well as rulemaking related to the scope of the DMCA, this decision will probably have an effect on the discussion. (Note that this case was decided by a 3-judge panel and thus isn't binding precedent.)"
Note that the court also reversed in part the lower court's ruling, specifically saying that the lower court should not have ruled on "whether the display of the larger image is a violation of Kelly's exclusive right to publically display his works."